Commonwealth v. Lukens Steel Co.
| Decision Date | 16 January 1961 |
| Citation | 402 Pa. 304,167 A.2d 142 |
| Parties | COMMONWEALTH of Pennsylvania v. LUKENS STEEL COMPANY, Appellant. |
| Court | Pennsylvania Supreme Court |
Hull, Leiby & Metzger, William H. Wood, Chas. W Hull, Harrisburg, for appellant.
George W. Keitel, Deputy Atty. gen., and Anne X. Alpern, Atty. Gen for appellee.
Before CHARLES ALVIN JONES, C. J., and MUSMANNO, BENJAMIN R. JONES COHEN, BOK and EAGEN, JJ.
Two cases with identic legal problems are involved in this appeal by the defendant taxpayer.
They concern the resettlement of defendant's corporate net income tax for the years 1951 and 1952. The cases were heard together by the Dauphin County court without a jury upon stipulated facts, and when judgment was given for the Commonwealth the taxpayer appealed.
The control law is the Act of May 16, 1935, P.L. 208, 72 P.S. § 3420a, as amended. Its pattern imposes a net income tax on corporations, the tax measured by the taxpayer's return to the Federal Government and the ascertainment of the tax by it. The Act has been upheld from Turco Paint & Varnish Co. v. Kalodner, 1936, 320 Pa. 421, 184 A. 37, to Commonwealth v. Koppers Co., 1959, 397 Pa. 523, 156 A.2d 328.
The Act provides for resettlements when a tax is changed by court or administrative action, and at 72 P.S. § 3420h it reads:
'* * * The tax imposed by this act shall be settled resettled, and otherwise imposed and adjusted in the same manner, within the same periods of time, and right of resettlement, review, appeal, and refund, as provided by law in the case of capital stock and franchise taxes imposed upon corporations.'
The provisions referred to in the case of capital stock and franchise taxes are found in the Act of April 9, 1929, P.L. 343, Art. XI, Secs. 1102 to 1105, both included, as amended, 72 P.S. §§ 1102-1105. These allow a petition for resettlement in ninety days (Sec. 1102), a petition for review to the Board of Finance and Revenue in sixty days (now ninety) (Sec. 1103), appeal in sixty days to the Court of Common Pleas of Dauphin County (Sec. 1104), and right of the Department of Revenue voluntarily within two years to make a resettlement (Sec. 1105). This last right also appears in the Corporate Net Income Tax Act at Sec. 8(a), 72 P.S. § 3420h, and the taxpayer is required to file a Report of Change, should any be made by the Federal fisc, in Sec. 7(a), 72 P.S. § 3420g.
In the 1951 case now before us the Department settled the defendant's tax on June 26, 1952. On March 9, 1954, the defendant filed its Report of Change, and the tax was resettled on March 31, 1954. On June 8, 1956, a second Report of Change was filed, and on August 8, 1956, the Department again resettled the tax accordingly. On November 26, 1956, defendant filed its Petition for Review, which was refused and then appealed to the Dauphin County Court on July 31, 1957.
In the 1952 case the Department settled the tax on June 16, 1953. On June 8, 1956, defendant filed its Report of Change, and the tax was resettled on October 10, 1956. On March 4, 1957, defendant filed its Petition for Review, which was refused, and then appealed to the Dauphin County Court on July 31, 1957.
It is unnecessary to discuss the nature of the changes now urged as corrections. Suffice it to say that they arose from errors made by the taxpayer in filing its original report. Defendant did not then try to correct its mistakes by a timely filing of a Petition for Resettlement or for Review, in the manner and within the time limit provided by law. It now seeks to correct its erroneous tax fractions by filing Reports of Change three and four years after the taxes had been settled. Even the two-year period for voluntary action by the tax officers had expired.
The appellant's main argument is that a resettlement means a reconsideration of everything involved, and that the first report and settlement concluded nothing.
It is conventional law that when a controlling statute calls for things to be done within stated times they must be done so or rights fail. In other fields than taxation, for example, a voter who sought to change his party affiliation was denied the privilege because he refused to take the oath required by an Act of Assembly, in Ermine v. Frankel, 1936, 322 Pa. 70, 185 A. 269, and in proving whether abandonment had occurred in an adoption case, the proponent was held closely to the Act in Schwab Adoption Case, 1947, 355 Pa. 534, 50 A.2d 504, 506. In the latter case we said:
'Where a remedy or method of procedure is provided by an Act, its provisions must be strictly pursued and exclusively applied: Bartron v. Northampton County, 342 Pa. 163, 168, 19 A.2d 263; Thompson v. Morrison, 352 Pa. 616, 624, 44 A.2d 55; Era Company, Ltd. v. Pittsburgh Consolidation Coal Company, 355 Pa. 219, 49 A.2d 342.'
In Commonwealth v. Allied Building Credits, Inc., 1956, 385 Pa. 370, 123 A.2d 686, the Corporate Net Income Tax Act, which faces us here, was involved, especially the provision that notice of settlement by the Department of Revenue shall reach the taxpayer before the end of the year after the tax report was required to be made. We quoted Mr. Justice Kephart in East Lake Road and Payne Ave., 1932, 309 Pa. 327, 163 A. 683, as follows:
Defendant uses his argument of a resettlement opening everything as a means to avoid the grip of these cases. It overlooks the obvious fact that the State and Federal processes are very different. The Federal authorities are not interested in the defendant's errors, namely, the wrongful setting of the tax jaws by showing cash in bank in both numerator and denominator of the tangible property fraction, or the amount that should have appeared only in the denominator of the gross receipts allocation fraction to show the proportion between business done in Pennsylvania to that done outside. Such matters are of concern to the State only. The Act, in Sec. 2, defines net income as that 'returned to and ascertained by the Federal Government', namely, the amount subject to Federal tax: Commonwealth v. Electrolux Corp., 1940, 362 Pa. 333, 67 A.2d 105. There is no direct relation between the elements in the Federal tax base and those in the fractions, which measure corporate activity within the State and are created by its laws. Thus it may be, quite as appellant contends, that the final ascertainment of the Federal tax may take time, but it does not follow that the correction of appellant's errors need await the outcome.
Nor is the State interested in the Federal...
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